Proof-of-stake protocols were designed to encourage users to lock their coins, but synthetic assets bypass this design to allow a double dip in DeFi.
Tushar Aggarwal, one of Forbes ’30 Under 30s in Asia, wears many hats: He started the crypto podcast Decipher Asia, works as a venture scout LuneX Ventures, and runs persistence, a platform that allows users to earn liquidity rewards while wagering coins.
Aggarwal’s platform issues synthetic assets, perhaps better understood as “redemption coupons,” for inserted coins that can be used elsewhere to maximize returns. This method is relevant for proof-of-stake coins that are not mechanically mined, but rather accumulate with those who block their tokens from circulation. Persistence makes it possible to use these inserted coins independently.
Originally from India, Aggarwal believes that cryptocurrency holds big things in store for the nation at both the GDP and individual worker levels. However, due to the Indian government’s hostility to the industry from which it could benefit so much, he works out of Singapore.
Aggarwal, 28 years old, began his journey into the crypto industry in 2017 as an investor and soon founded and hosted the podcast Decrypt Asia, in which he interviewed “all types of actors in the ecosystem – fund managers, investors, entrepreneurs and service providers”. The podcast acted like a stepping stone and opened up opportunities to write about the cryptocurrency revolution Technology in asia, “The equivalent of TechCrunch in the West”. Aggarwal was an authority.
In 2018, he was contacted by a venture capitalist who came across his writings and podcast. The VC sought advice on behalf of its company Golden Gate Ventures, which wanted to set up a crypto fund. “Basically, I asked her for a job on site and became the first employee for the Golden Gate crypto fund – this fund is called LuneX Ventures,” he recalls. Aggarwal still serves as the venture scout for the fund, which he describes as the “only regulated crypto fund of a VC fund in Southeast Asia”.
He founded the Persistence platform in 2019 after a series of hackathons because “I wanted to be an operator instead of a capital allocator”.
The functions of the platform are based on the Tender mint Algorithm, i.e. it accepts proof-of-stake coins like persistence, REN, LUNA, CRO, IRIS, BAND and KAVA. The magic is that even after staking, synthetic assets based on the coins can be deposited as liquidity on a decentralized exchange to earn fees, while the original coins are still “staked in the background, giving you rewards too when staking out “.
“We allow you to play in one location, but we give you a representative coin that you can use in other locations.”
“Liquid staking” is therefore a suitable descriptor, as both liquidity provision and staking are combined. This process is beneficial as the token holder does not have to risk liquidity fees or staking, which results in a higher return on their capital. While the “original” coins are deployed, the representative coins used to provide liquidity are 100% covered by the deployed assets, which means that “whoever ends up holding the representative coin will eventually get access” to the underlying asset .
“Liquid staking is something that essentially addresses the problems of 10,000 to 100,000 people who own proof-of-stake coins and are familiar with how staking works.”
Despite describing his parents as ordinary Indian middle-class officials, Aggarwal spent five years of his youth at the foot of the Himalayas with “the children of really powerful politicians and people who run India.” Doon School is “the Eton of India that produced Prime Ministers, Army chiefs, journalists, movie stars, government officials, business people,” he explains, comparing his school to the famous British boarding school with a similar reputation. Since the school was founded when India was still a British colony, “it still represents many of these ideals which, from today’s perspective, may be a bit old,” muses Aggarwal.
In 2010 he went to Nanyang Technological University in Singapore, “which I think is one of the top five universities in Asia”, where he studied business administration and promised to stay in the country for three years after graduation for a 60% discount on tuition fees . Aggarwal explains that this loan agreement was part of a “policy that Singapore had put in place to attract talent from a very young age” – a successful policy since Aggarwal did not return to live in India.
After graduating in 2013, he spent two years in private equity at PwC before moving to Sia Partners, a French boutique consultancy specializing in financial services. In this role, he spent time in Hong Kong, Malaysia and Thailand while working with the private banking departments of European banks in the region.
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– pSTAKE Finance (@pStakeFinance) August 21, 2021
Working as a travel consultant meant that most of Aggarwal’s daily expenses were covered by his employer, which provided him with ample savings. “It’s a very Indian and Middle Eastern thing – where every penny you save is invested in gold or real estate – and that’s what I did,” as his parents taught him. Rather than buying apartments that “only have that much room to grow,” he looked at the bigger, long-term picture and focused on the land itself.
After selling some properties in late 2016, Aggarwal considered new investment opportunities. He first got into angel investing but soon came across “crypto and basically just went all-in”. He says he was in the right place at the right time and explains that “crypto was super hot in Singapore” when he invested in 2017 before listing several projects from the time like Republic Protocol, OmiseGo and Kyber Network. He was lucky with his timing and gained financial independence in just a few months.
“By the end of 2017, I had done well enough to quit my job and start a podcast,” he says.
Opportunity in India
“I am originally from India; our units are all based in Singapore, ”Aggarwal tells me, making it clear that he“ wants to be a little careful as I move across Singapore and India ”. The problem is that although his team is based there, “there is enormous regulatory uncertainty in India”. Because of this, Singapore benefits from Aggarwal’s success.
“That’s the big problem the Indian government has with crypto because it’s so easy to move your capital around the world. As soon as it is in a wallet, it is basically not subject to any jurisdiction. “
Capital controls are one aspect that keeps entrepreneurs like Aggarwal away from his native India. “If your money is in India or China, you can’t take it overseas beyond a certain amount,” he explains. On the other hand, if you are in the US or Singapore, you can “basically take your money anywhere”.
Because of the Indian government’s “beef” with crypto, Aggarwal decides to build his crypto empire from Singapore. Only recently did the authorities in India abandon a plan to ban Bitcoin downright. “We only use India as a base to access talent,” he admits with a view to persistence.
“We are expanding from India, so to speak, but building for the world. Our target market is not India, ”he says.
Indian tech workers are building a decentralized future as their country struggles to attract direct investment into the sector. Aggarwal sees the unfortunate status quo as a natural continuation of a Web 2.0 phenomenon, in which the digital machinery of many large multinational corporations is “run by Indians” who provide inexpensive labor.
Indians have a long cultural tradition of investing in gold for retirement and inheritance. On public holidays, even relatively poor families regularly buy small gold jewels and pieces of jewelry that they can keep permanently in the household. In 2015 the Indian government even got the Gold monetization scheme to encourage people to deposit their gold and earn interest on their holdings.
With this socially rooted tradition of saving tangible assets, it is relatively easy to imagine that masses of Indians would take the plunge to “digital gold”. At least it’s a lot easier to imagine than in countries like my native Finland, where saving for retirement is not a widespread concept and most people prefer to keep their savings in cash accounts.
Aggarwal explains that while only 3-4% of Indian households are invested in stocks compared to 30-40% of US households, “approximately $ 50 billion worth of crypto assets are held by Indians.” If and when the government allows Indians to participate fully in the crypto economy, he foresees the opening of the floodgates. As an example of what the future might bring, he cites Dream11, a fantasy sports betting application that has 100 million users out of a population of 1.4 billion.
30 under 30
Recently introduced by Forbes 30 Under 30 Asia, Aggarwal has come a long way in a short time. Aggarwal believes that “the three greatest levers available to any individual or company are technology, media and capital”.
Today, Aggarwal is focusing on these three advantages to grow his business: Persistence covers technology leverage, while LuneX Ventures allows him to raise capital for other promising projects. On the media side, he keeps it together with the reach of his podcast – and articles like this one.
“Asymmetrical bets – 1x downside, 100x upside. It was very clear to me that I wanted to be in a place where I could make asymmetrical bets. “
In addition, and with the help of this leverage, asymmetric bets are another trick up the sleeve of Aggarwal. He knew from the start that if there was an industry where such positive one-sided bets could be made, it had to be crypto. When asked how much money would be enough for him, Aggarwal becomes philosophical and explains that money can only buy access to good people, time and space for thought.
With all the levers Aggarwal pulls, I wonder how much time he can have to himself. It is evident, however, that he insists on drawing the right ones.